848 F.2d 256 (D.C. Cir. 1988), 85-1745, Public Citizen v. National Highway Traffic Safety Admin.

Docket Nº:85-1745 to 85-1748.
Citation:848 F.2d 256
Party Name:PUBLIC CITIZEN, et al., Petitioners, v. NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION, et al., Respondents, Ford Motor Company, Automobile Importers of America, Inc., General Motors Corporation, State of New York, Intervenors. PEOPLE of the State of California, et al., Petitioners, v. NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION, et al., Respond
Case Date:June 07, 1988
Court:United States Courts of Appeals, Court of Appeals for the District of Columbia Circuit
 
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Page 256

848 F.2d 256 (D.C. Cir. 1988)

PUBLIC CITIZEN, et al., Petitioners,

v.

NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION, et al., Respondents,

Ford Motor Company, Automobile Importers of America, Inc.,

General Motors Corporation, State of New York,

Intervenors.

PEOPLE of the State of California, et al., Petitioners,

v.

NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION, et al., Respondents,

Ford Motor Company, Automobile Importers of America, Inc.,

General Motors Corporation, State of New York,

Intervenors.

CITY OF NEW YORK, et al., Petitioners,

v.

NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION, et al., Respondents,

Ford Motor Company, Automobile Importers of America, Inc.,

General Motors Corporation, State of New York,

Intervenors.

CITY OF LOS ANGELES, a California Municipal Corporation, Petitioner,

v.

NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION, et al., Respondents,

Automobile Importers of America, Inc., General Motors

Corporation, Ford Motor Company, Intervenors.

Nos. 85-1745 to 85-1748.

United States Court of Appeals, District of Columbia Circuit.

June 7, 1988

Page 257

[Copyrighted Material Omitted]

Page 258

Argued Nov. 25, 1986.

Cornish F. Hitchcock, Washington, D.C., and Susan L. Durbin, Deputy Atty. Gen., State of Cal., Los Angeles, Cal., with whom Alan B. Morrison, Clarence M. Ditlow, III, Washington, D.C., for Public Citizen, et al., John K. Van de Kamp, Atty. Gen., State of Cal., San Francisco, Cal., Theodora Berger, Asst. Atty. Gen., Los Angeles, Cal., Craig C. Thompson, Deputy Atty. Gen., State of Cal., Sacramento, Cal., James D. Montgomery, Corp. Counsel, and Amy L. Beckett, Asst. Corp. Counsel, Chicago, Ill., Gary R. Netzer and Roger J. Holt, Los Angeles, Cal., Robert Abrams, Atty. Gen., State of N.Y., Peter Bienstock and Samuel A. Cherniak, Asst. Attys. Gen., State of N.Y., New York City, were on the joint brief for petitioners and intervenors in Nos. 85-1745 et al. Walter A. Kretz, Jr., New York City, entered an appearance for petitioners, City of New York, et al. in No. 85-1747. Nancy Minor, Asst. Corp. Counsel, Boston, Mass., entered an appearance for petitioner, City of Boston in No. 85-1747.

Ezra I. Bailik entered an appearance for intervenor, State of N.Y. in Nos. 85-1745 et al.

Mark B. Stern, Atty., Dept. of Justice, with whom Richard K. Willard, Asst. Atty. Gen., John F. Cordes, Atty., Dept. of Justice, Stephen P. Wood and David W. Allen, Asst. Chief Counsels, Enid Rubenstein, Eileen T. Leahy and J. Edward Clancy, Attys., Nat. Highway Traffic Safety Admin., Washington, D.C., were on the brief for respondents in Nos. 85-1745 et al.

Edward W. Warren, with whom David G. Norrell, Washington, D.C., Williams L. Weber, Jr., and Thomas L. Arnett, Detroit, Mich., were on the brief for intervenor, General Motors Corp. in Nos. 85-1745 et al. Arthur F. Sampson, III, Washington, D.C., also entered an appearance for intervenor, General Motors Corp.

Paula Winkler-Doman and James A. Brown, Dearborn, Mich., were on the brief for intervenor, Ford Motor Co. in Nos. 85-1745 et al.

Milton D. Andrews, Lance E. Tunick, Barry S. Neuman, Washington, D.C., and Charles H. Lockwood, III, Arlington, Va., were on the brief for intervenor, Auto. Importers of America, Inc. in Nos. 85-1745 et al.

Curtis F. Thompson, Asst. Atty. Gen., State of Mo., Jefferson City, Mo., was on the brief for amici curiae, State of Mo. and State of Okl., urging affirmance of the orders on review.

Joseph A. Califano, Jr. and Gerald M. Rosberg, Washington, D.C., were on the brief for amicus curiae, Chrysler Corp., urging remand.

Page 259

Before MIKVA, RUTH BADER GINSBURG and SILBERMAN, Circuit judges.

Opinion for the court filed by Circuit Judge RUTH BADER GINSBURG.

Dissenting opinion filed by Circuit Judge SILBERMAN.

RUTH BADER GINSBURG, Circuit Judge:

Petitioners challenge a final rule issued by the National Highway Transportation Safety Administration (NHTSA) pursuant to the Energy Policy and Conservation Act of 1975 (EPCA); 1 the rule, released September 30, 1985, set the mandatory Corporate Average Fuel Economy (CAFE) standard for 1986 model year passenger automobiles at 26.0 miles per gallon (mpg). 2 EPCA specifies a higher 27.5 (mpg) 1986 CAFE standard, 3 with the proviso that this standard may be amended by rule and set at the "maximum feasible average fuel economy level," 4 determined by reference to criteria listed in the statute. 5

Petitioners, four non-profit consumer and environmental organizations, four municipalities, and the State of California, assert that NHTSA's decision to "roll back" the CAFE standard specified by statute is arbitrary and capricious, and contrary to EPCA. The agency's determination that the higher standard was not "economically practicable," petitioners maintain, improperly elevated consideration of market forces and consumer demand, and impermissibly subordinated the statute's "technology-forcing" design. Furthermore, petitioners say that in setting the 26.0 mpg standard, NHTSA ignored the "need of the Nation to conserve energy." 6 Finally, petitioners attack NHTSA's decision not to undertake and issue a complete Environmental Impact Statement (EIS); that decision, petitioners contend, disregards the agency's charge under the National Environmental Policy Act (NEPA). 7

NHTSA initially challenges the petitioners' standing to assert any claims under EPCA or NEPA; on the merits, the agency defends its actions as consistent with all relevant legislative prescriptions. We held this case in abeyance pending the full court's consideration of the standing issue in Center for Auto Safety v. Thomas, --- F.2d 843 (D.C.Cir. 1988) (en banc) (5-4-1 vote) (CAS-II ). In CAS-II, eight members of the ten-member court acknowledged that the panel decision in Center for Auto Safety v. NHTSA, 793 F.2d 1322 (D.C.Cir.1986) (CAS-I ) states the current law of this circuit. In accord with CAS-I, we hold that petitioners (with one exception) have standing under both EPCA and NEPA to challenge NHTSA's action. On the merits, however, we conclude that NHTSA's decision to lower the 1986 CAFE standard "reasonabl[y] accomodat[es] ... conflicting policies that were committed to the agency's care by the statute ...." Chevron, U.S.A., Inc. v. NRDC, 467 U.S. 837, 845, 104 S.Ct. 2778, 2783, 81 L.Ed.2d 694 (1984), (quoting United States v. Shimer, 367 U.S. 374, 382-83, 81 S.Ct. 1554, 1560, 6 L.Ed.2d 908 (1961)). We also reject petitioners' challenge to NHTSA's decision not to issue an EIS; under the particular circumstances presented, we do not find that decision so unworthy as to be characterized "arbitrary, capricious, [or] an abuse of discretion." 8 Accordingly, we deny the petitions for review.

I.

The statutory framework for the rulemaking petitioners challenge is described in

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detail in CAS-I, 793 F.2d at 1324-26; we restate that background summarily here. In EPCA, Congress set the CAFE standard for passenger automobiles for the 1986 model year (and all subsequent years) at 27.5 miles per gallon. 9 The statute authorizes the Secretary of Transportation to amend the CAFE standard, by rule, "to a level which he determines is the maximum feasible average fuel economy level" for a given model year. 10 In making that determination, the Secretary must consider four factors:

(1) technological feasibility;

(2) economic practicability;

(3) the effect of other Federal motor vehicle standards on fuel economy; and

(4) the need of the Nation to conserve energy. 11

A manufacturer who fails to meet the applicable CAFE standard is liable for a civil penalty of $5 for each 1/10 mpg by which the manufacturer's fleet average falls below the standard, multiplied by the number of vehicles manufactured. 12

In the rule challenged here, NHTSA 13 determined that "the maximum feasible average fuel economy for MY [model year] 1986 is 26.0 mpg," and accordingly amended the 1986 CAFE standard. The agency emphasized that EPCA "imposed a long-term obligation on manufacturers to achieve a 27.5 mpg fuel economy level, [so that] it would be inappropriate to reduce the [1986 CAFE] standard if a current inability to meet the standard simply resulted from manufacturers previously declining to take appropriate steps to improve their average fuel economy as required by the Act." 14 NHTSA found, however, that General Motors (GM) and Ford, the two largest manufacturers professing an inability to reach the 27.5 mpg level, had "sufficient plans to meet the 27.5 mpg standard, made significant progress toward doing so, and were prevented from fully implementing those plans by unforeseen events." 15 The principal "unforeseen event" NHTSA cited was the rapid decline in gasoline prices during the mid-1980's, attended by a shift in consumer demand away from smaller, more fuel-efficient models. In view of this development, NHTSA set the 1986 standard at 26.0 mpg, the maximum capability of GM and Ford. 16

The agency determined that the higher standard set by the statute would not be "economically practicable" because "any additional efforts by the manufacturers to increase their MY 1986 CAFE would largely be limited to attempts to change product mixes through increased marketing efforts and/or product restrictions ... [which] could result in significant adverse economic impacts and restrict consumer choice to an unreasonable degree." 17 The "possible energy savings associated with maintaining the 27.5 mpg standard," the agency concluded, did not outweigh these negative economic effects; NHTSA regarded the magnitude of possible energy savings as "uncertain" in light of the prospect that restrictions on the availability of larger cars might cause some consumers to retain their older, even less fuel-efficient models. 18

More firmly, NHTSA found the maximum yearly impact of the lower (26.0...

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